Congress Should Pass the Fair Access to Banking Act—ADF Senior Counsel

Congress Should Pass the Fair Access to Banking Act—ADF Senior Counsel

No American should be denied access to basic financial services such as a bank account, debit or credit card, or payment processing because of their religious political views, according to Jeremy Tedesco, senior counsel of Alliance Defending Freedom (ADF).

In testimony before the U.S. House Select Subcommittee on March 8, Tedesco said that many Americans have good reason to fear that these essential financial services could be abruptly cancelled based on the exercise of their First Amendment freedoms. 

He cited numerous examples of religious and conservative organizations or persons being denied financial services or having accounts frozen under suspicious circumstances. ADF has represented two of these ministries, Tedesco said: Indigenous Advance and National Committee for Religious Freedom. 

In April 2023, Bank of America abruptly canceled Indigenous Advance’s bank account, which the Tennessee-based ministry had opened in 2015. Indigenous Advance partners with on-the-ground groups in Uganda to care for orphaned and at-risk children, educate vulnerable children and prisoners, stop sex trafficking, and provide other essential services, including vocational training and more.

The initial notice provided no specific reason for the cancellations, stating only that “upon review of your account(s), we have determined you’re operating in a business type we have chosen not to service at Bank of America.”

As a result of the bank’s abrupt action, Indigenous Advance had to tell its nine Ugandan employees to wait an extra week to receive a paycheck that they depend on for survival. 

The National Committee for Religious Freedom (NCRF) only found out its JP Morgan Chase account had been closed when one of its founders tried to deposit a donation at a local chase branch in May 2022. NCRF had opened the account the previous April. NCRF is a nonprofit advocacy group that defends the right of everyone in America to live out their faith freely.

Systemic risk of political and religious bias pervades the financial industry, Tedesco said, particularly within the largest banks and payment processes.

“They maintain reputational risk policies that allow them unfettered discretion to punish customers who have, in the institution’s view, problematic views. Many also have prohibitions on ‘hate’ speech and ‘intolerance’ that require subjective and value-based judgments on a customer’s viewpoint. Both types of policies chill speech, and neither would be permissible if the government maintained the policy,” he said. 

But government regulators have shown a pattern and practice of coercing financial institutions to cancel customers through these policies. Whether it was Operation Choke Point nearly a decade ago or the state of New York in a case currently at the U.S. Supreme Court, both instances show that the government can and will weaponize the financial marketplace against Americans for political benefit. 

Congress needs to support and pass the Fair Access to Banking Act, H.R. 2743 and S. 293 to target these harmful policies, Tedesco said, and it should require greater transparency from financial regulators and institutions. 

The Fair Access to Banking Act would require the largest banks to deny service based only upon “quantitative, impartial risk-based standards established in advance by the covered bank.” It would also prohibit those banks from using reputational risk as the sole reason for denying service. 

According to Tedesco, “This would pare back reputational risk policies, which are ‘less quantifiable’ than credit or market risk. And it would prohibit any ‘subjective or category-based evaluations to deny certain persons access to financial services’ whether made under reputation risk, hate speech, or other types of policies, as the OCC stated when enacting (a later retracted) Fair Access rule in 2021. 

Americans need to know about the risk of politicized de-banking, Tedesco said in closing. 

“Many conservative and religious citizens and organizations are one disgruntled activist, employee, or regulator away from losing their bank account or payment processing,” Tedesco told the subcommittee. “Recent incidents have shown that this is happening, that it is accelerating, and that government agencies and financial institutions are all too willing to cooperate to harm our civil liberties.

“We cannot live in a free country if access to the marketplace depends on our political or religious views,” he said. 

 Above: Bank of America canceled Indigenous Advance Ministries Account in 2023.

Greg Balfour Evans / Alamy Stock Photo

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